The shareholder settlement adds to the billions in fines that Wells Fargo has paid for fraud and consumer abuses under Chao’s leadership
WASHINGTON — A federal judge approved a $240 million settlement against Wells Fargo representatives Tuesday, including Transportation Secretary and former board member Elaine Chao. In February, insurers agreed to pay out millions to shareholders who sued Chao and others for shirking their responsibilities while Wells Fargo committed serious consumer abuses.
Chao served as a board member from 2011 until 2017, a time period marked by constant scandals, before she resigned to become President Trump’s Transportation Secretary. As a Wells Fargo board member, Chao was responsible for overseeing the ethics and fair corporate practices of the mega bank. She sat on the bank’s Corporate Responsibility & Finance and Credit & Finance committees, all while Wells Fargo committed numerous consumer abuses, including improperly repossessing veterans’ cars and wreaking havoc on their credit. She oversaw Wells Fargo’s residential lending practices that led to nearly 400 customers being improperly foreclosed on and losing their homes, all because of a computer error. On Chao’s watch, Wells Fargo charged more than half a million borrowers for insurance they did not want or need.
“Chao was asleep at the wheel at Wells Fargo and thousands of Americans fell victim to their crimes,” said Lizzy Price, spokesperson for Restore Public Trust. “The American people deserve to know exactly what went wrong at Wells Fargo under Chao’s oversight and if she is making the same mistakes at the Department of Transportation, potentially putting lives at risk. We need to know whether Chao’s lack of oversight of FAA safety regulators resulted in lives lost. What is Congress waiting for? It’s time for Congress to investigate Chao.”
In December, Restore Public Trust urged then-incoming House Financial Services Committee Chair Maxine Waters and the Financial Services Committee to look into Chao’s role during Wells Fargo’s scandals while she served on the Wells Fargo Board of Directors.
The news follows recent allegations against Chao that under her leadership at Transportation, the culture of the Federal Aviation Administration (FAA) led to failures at aviation giant Boeing, and just days after news that Chao quietly appointed the CEO of a commercial drone developer to lead the Federal Aviation Administration (FAA) Drone Advisory Committee, ignoring clear conflicts of interest.